Full development begins at PNG's Moran Central oil field

Sydney, 19Feb2001

The full development of Papua New Guinea's Moran Central oil field will begin immediately following the signing on Feb 17 of a production licence, PDL5, for the portion of the field which lay in exploration permit PPL138, part-holder Oil Search said Monday. Initial project development will involve the construction of around 22 km (14 miles) of roads linking Moran Central with the existing Kutubu oil field network. It will also involve the expansion of the Agogo processing facility to provide for capacity of 24,000 b/d of oil and the injection of 100-120-mil cu ft/day of gas into Moran to assist in oil recovery, Oil Search said. First gas injection is expected at the end of the first quarter of 2002 and total project expenditure, including contingency, is estimated at $195.4-mil.
Moran Central straddles permits PDL5, with 55% of the field, and PDL2, with 45%. The field has been producing from extended well testing over the past three years, with output recently running at just under 15,000 b/d. Oil Search said that the PDL5 joint venture would receive up to 85% of output from Moran Central over the next two years as part of the balancing of production already taken by PDL2. Capital cost equalization will also take place, with PDL5 paying the PDL2 partners around $60-mil in back costs. Oil Search holds 52.5% of PDL5 and 27.14% of PDL2, making its net payment $15-mil but giving it an entitlement to around 49% of oil production in 2001 and 2002. The field is operated by Chevron Niugini, which holds 19.38% of PDL2.